Question 1

Winona enters into a contract with Peyton to buy Peyton's land based on Peyton's assertion that the land is legally open to development. After the sale,Winona learns what Peyton knew previously-only a small section of the land can be built on. A local law prohibits construction on the rest of the property. Winona can

Accepted Answer

The answer of Winona enters into a contract with Peyton...

Question 2

County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from James to Kate,the furnished information is mistaken.
-Refer to Fact Pattern 14-3. The contract between James and Kate that includes the mistake may be rescinded

Accepted Answer

The contract may be rescinded if the mistake involves a material fact. A material fact is one that would have influenced the decision of one or both parties to enter into the contract. Since the mistake in this case involves the transfer of title to the real estate, which is a material fact, the contract may be rescinded.

Question 3

Gene sells a trail bike to Hollis without disclosing that the odome-ter,which reads 10,000 miles,was disconnected 90,000 miles ago. Gene is most likely liable for

Accepted Answer

Gene's failure to disclose the fact that the odometer was disconnected 90,000 miles ago constitutes fraud. Hollis was led to believe that the bike only had 10,000 miles on it, and Gene's failure to disclose the true mileage constitutes dishonesty and deceit. Gene can be held liable for fraud in this scenario.

Question 4

Garth owns two all-terrain vehicles (ATVs),worth $1,000 and $500,re-spec-tively. Helen agrees to buy "Garth's ATV" for $750. Garth believes,in good faith,that he is selling the $500 ATV. Helen believes,in good faith,that she is buying the $1,000 ATV. In this situation

Accepted Answer

There is no contract as there is a mutual mistake of fact regarding which ATV is being sold. Both parties were mistaken in their belief of which ATV was being sold, which prevents the formation of a contract. As a result, neither party is entitled to any remedy.

Question 5

Hank,a salesperson for Ideal Autos,promises Jennie a certain car will give her a "smooth ride." Hank offers a test drive,which Jennie de-clines. She buys the car but soon realizes its suspension is in poor condi-tion. Jennie

Accepted Answer

The answer of Hank,a salesperson for Ideal Autos,promises Jennie a...

Question 6

Lewis,an employee of Silos,Inc.,makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently,Silos's bid is significantly low.
-Refer to Fact Pattern 14-2. Any contract with AgriCo-op that includes the mistake may be rescinded

Accepted Answer

A contract may be rescinded if the mistake was made inadvertently and without gross negligence. In this scenario, Lewis made a mistake in totaling the estimated costs, which suggests it was an unintentional error rather than intentional or negligent. Also, the fact that the mistake was a significant mathematical error supports the notion that it was inadvertent rather than intelligent distraction. Therefore, option A is the best choice.

Question 7

Lewis,an employee of Silos,Inc.,makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently,Silos's bid is significantly low.
-Refer to Fact Pattern 14-2. Any contract with AgriCo-op that includes the mistake may be rescinded

Accepted Answer

If AgriCo-op knew or should have known of the mistake, then they cannot take advantage of the mistake to enforce the contract. This is a defense to the enforcement of a contract based on mistake, known as unilateral mistake. Therefore, any contract with AgriCo-op that includes the mistake may be rescinded if AgriCo-op knew or should have known of the mistake. However, if Silos knew or should have known of the mistake, it would not be a defense as it is Silos' responsibility to ensure the accuracy of their bid. The knowledge of Lewis's supervisor is not relevant in determining whether the mistake can be rescinded.

Question 8

Nora enters into a contract with Oceanic Transport,Inc.,to insure and ship a painting from Paris to New York City for a certain price. But Oceanic makes a mistake in adding the costs,which results in a contract price that is $1,000 less than the true cost. Most likely,a court would

Accepted Answer

A court would likely allow the parties to rescind the contract due to the mistake, as it was a mutual mistake regarding a material fact (the cost), which affects the agreement's fairness.

Question 9

Digital Storage,Inc.,offers to sell provide cloud-computing services to Entrepreneur Enterprises,Inc.,but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Entrepreneur Enterprisesaccepts the written offer.
-Refer to Fact Pattern 14-1. Entrepreneur Enterprises'best argument in favor of enforcement of the contract is that

Accepted Answer

The best argument in favor of enforcement of the contract is that a unilateral mistake does not afford relief from a contract. This means that if one party makes a mistake, but the other party did not know about the mistake and did not contribute to it, the contract will still be enforceable. Therefore, even though Digital Storage, Inc. made a mistake in the price, Entrepreneur Enterprises is still bound by the terms of the contract. The other options are not relevant to this scenario.

Question 10

Kyle,an accountant,convinces his client Lucille to sign a contract to invest her savings in 2Gether,a nonexistent social-networking Web site. There is clear and convincing evidence that Lucille did not act out of her free will. This is

Accepted Answer

Undue influence occurs when one person uses their power or relationship to pressure another person into making a decision that they would not have made on their own free will. In this scenario, Kyle, as Lucille's accountant, had a position of authority and trust over her, which he used to convince her to invest in a nonexistent company. Therefore, Lucille did not act out of her free will, making this an example of undue influence.

Question 11

County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from James to Kate,the furnished information is mistaken.
-Refer to Fact Pattern 14-3. If James and Kate are both ignorant of the mistake,it is

Accepted Answer

A bilateral mistake occurs when both parties to a contract are mistaken about a material fact. In this scenario, both James and Kate are unaware of the mistake, making it a bilateral mistake.

Question 12

Camille,a tennis pro,convinces Dante,who has no athletic ability,that he has considerable skill and induces him to pay Camille $1,000 for tennis lessons. When Danterealizes the truth,he files a suit against Camille. Danteis most likely to recover on the basis of

Accepted Answer

Camille induced Dante to pay her $1,000 for tennis lessons by convincing him that he had considerable skill. This is an example of fraud, which occurs when one party intentionally and knowingly makes false statements with the intent to deceive another party and induce them to act. Dante can recover on the basis of fraud, as he was induced to pay for something that he would not have paid for had he known the truth.

Question 13

County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from James to Kate,the furnished information is mistaken.
-Refer to Fact Pattern 14-3. The contract between James and Kate that includes the mistake may be rescinded

Accepted Answer

According to the doctrine of mutual mistake, a contract may be rescinded if the mistake concerns a basic assumption on which the contract was made. This means that the mistake must be fundamental to the contract and relate to a matter that was central to the agreement between the parties. In this case, the mistake in the furnished information may have led to a fundamental misunderstanding of the terms of the sale, making it possible to rescind the contract. Neither B nor C offers a sufficient condition for rescission, and D is too absolute as there are cases when rescission is possible.

Question 14

Kari,a real estate agent,assures Linc that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Linc buys the property and then discovers that the street has no more traffic than any other in its vicinity. Linc is most likely a victim of

Accepted Answer

The real estate agent, Kari, made a false statement to Linc, which induced him to purchase the property. This amounts to fraud.

Question 15

Garland induces Jules to enter into a contract for the purchase of a Chef's Burger House restaurant. Garland knowingly misrepresents a number of material features about the restaurant and the business. When Jules discovers the truth,he can

Accepted Answer

Jules can rescind the contract on the basis of fraud since Garland knowingly misrepresented material features about the restaurant and the business. Rescinding the contract means that Jules can seek to undo the contract and be put back in the position they were in before the contract was made. Option A is incorrect because it assumes that Jules assumed the risk of misrepresentation, which may not be the case. Option C is also incorrect because mistakes are unilateral and do not involve the other party's deceitful conduct. Option D, undue influence, is not applicable because there is no evidence that Garland exercised any undue influence over Jules.

Question 16

Used Car Lot's salesperson Vic offers to sell Will,who is twenty years of age,a car about which Vic intentionally misrepresents its past use and repairs. In reliance on the misrepresentations,Will buys the car. To prove fraud in this transaction,Will does not have to show that

Accepted Answer

Will's age is not relevant to proving fraud in this transaction. The other options (A, B, D) are all necessary elements to prove fraud. A requires intent, B requires materiality, and D requires justifiable reliance.

Question 17

Digital Storage,Inc.,offers to sell provide cloud-computing services to Entrepreneur Enterprises,Inc.,but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Entrepreneur Enterprisesaccepts the written offer.
-Refer to Fact Pattern 14-1. Digital Storage'sbest defense against enforcement of the contract is that Entrepreneur Enterprisesknew

Accepted Answer

The answer of Digital Storage,Inc.,offers to sell provide cloud-computing services...

Question 18

Lewis,an employee of Silos,Inc.,makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently,Silos's bid is significantly low.
-Refer to Fact Pattern 14-2. Any contract with AgriCo-op that includes the mistake may be rescinded

Accepted Answer

A mistake in totaling the estimated costs for a project that results in a significantly low bid would be considered a material fact. A material fact is a fact that is important enough to influence a reasonable person's decision in entering into a contract. As such, any contract with AgriCo-op that includes such a mistake may be rescinded if it involves a material fact. Therefore, choice A is the best answer.

Question 19

Phoebe enters into a contract with Everest for a guided tour of Whitewater Canyon. Everest acts as though he is an experienced,knowledgeable guide,when in reality he has never been in the canyon. Phoebe is most likely a victim of

Accepted Answer

Phoebe is a victim of fraud as Everest has intentionally misled her by pretending to have knowledge and experience that he doesn't actually possess.

Question 20

Dixon agrees to sell to Elmore,for $1,500,a remote parcel of land. They believe the land to be worthless,but beneath it is a shale rock containing oil. A court would

Accepted Answer

The court would not rescind the contract because both parties made a mutual mistake regarding the value of the land, not the nature of the land itself. The mistake was about the land's worth, which does not typically warrant rescission.

Quiz 14: Voluntary Consent

Gene sells a trail bike to Hollis without disclosing that the odome-ter,which reads 10,000 miles,was disconnected 90,000 miles ago. Gene is most likely liable for

Garth owns two all-terrain vehicles (ATVs) ,worth $1,000 and $500,re-spec-tively. Helen agrees to buy "Garth's ATV" for $750. Garth believes,in good faith,that he is selling the $500 ATV. Helen believes,in good faith,that she is buying the $1,000 ATV. In this situation

Hank,a salesperson for Ideal Autos,promises Jennie a certain car will give her a "smooth ride." Hank offers a test drive,which Jennie de-clines. She buys the car but soon realizes its suspension is in poor condi-tion. Jennie

Lewis,an employee of Silos,Inc.,makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently,Silos's bid is significantly low. -Refer to Fact Pattern 14-2. Any contract with AgriCo-op that includes the mistake may be rescinded

Lewis,an employee of Silos,Inc.,makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently,Silos's bid is significantly low. -Refer to Fact Pattern 14-2. Any contract with AgriCo-op that includes the mistake may be rescinded

Nora enters into a contract with Oceanic Transport,Inc.,to insure and ship a painting from Paris to New York City for a certain price. But Oceanic makes a mistake in adding the costs,which results in a contract price that is $1,000 less than the true cost. Most likely,a court would

Kyle,an accountant,convinces his client Lucille to sign a contract to invest her savings in 2Gether,a nonexistent social-networking Web site. There is clear and convincing evidence that Lucille did not act out of her free will. This is

Camille,a tennis pro,convinces Dante,who has no athletic ability,that he has considerable skill and induces him to pay Camille $1,000 for tennis lessons. When Danterealizes the truth,he files a suit against Camille. Danteis most likely to recover on the basis of

Kari,a real estate agent,assures Linc that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Linc buys the property and then discovers that the street has no more traffic than any other in its vicinity. Linc is most likely a victim of

Garland induces Jules to enter into a contract for the purchase of a Chef's Burger House restaurant. Garland knowingly misrepresents a number of material features about the restaurant and the business. When Jules discovers the truth,he can

Used Car Lot's salesperson Vic offers to sell Will,who is twenty years of age,a car about which Vic intentionally misrepresents its past use and repairs. In reliance on the misrepresentations,Will buys the car. To prove fraud in this transaction,Will does not have to show that

Lewis,an employee of Silos,Inc.,makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently,Silos's bid is significantly low. -Refer to Fact Pattern 14-2. Any contract with AgriCo-op that includes the mistake may be rescinded

Phoebe enters into a contract with Everest for a guided tour of Whitewater Canyon. Everest acts as though he is an experienced,knowledgeable guide,when in reality he has never been in the canyon. Phoebe is most likely a victim of

Dixon agrees to sell to Elmore,for $1,500,a remote parcel of land. They believe the land to be worthless,but beneath it is a shale rock containing oil. A court would